| y"> | | | | The Owner -----"We have grown to the point that |
| Purchasing Managers, purchasing agents and buyers | | | | Purchasing Management needs to become a strategic |
| are the life support system of your supply chain. I | | | | initiative. Let's promote Old Joe, he's been with us for |
| often use the phrase in leadership training; "You're | | | | twenty two years now and has been handling the |
| only as good as the people you surround yourself | | | | commodity side of our business for the past fifteen |
| with." That phrase also applies to one of the most | | | | years." |
| critical functions in wholesale distribution, the | | | | The VP of Sales ---- "But Joe doesn't have any |
| Purchasing Manager. So what does being the life | | | | formal management training and some of our sales |
| support systems to supply chain management mean? | | | | people think he's a real pain! He's doesn't understand |
| It means purchasing is the center of the universe, | | | | cost effectiveness and lacks creativity. Remember |
| the equator, the fulcrum when it comes to meeting | | | | the major problem we had with our number one |
| customer demands. This is a common fact. We all | | | | supplier." |
| know it. Most of us say it and yet few of us really | | | | The Owner --- "Hey, he's been with me for twenty |
| understand it. Even the US Department of Labor | | | | two years. He deserves a promotion. We can send |
| Bureau of Statistics supports it with reams of data | | | | him to a seminar on Time Management." |
| on purchasing. However, the more important, often | | | | Some of you readers may recognize that |
| overlooked, misunderstood and underutilized concept | | | | conversation however many may not recognize the |
| is that Purchasing Managers in our industry are really | | | | fallacies that lie within it. In wholesale distribution, it |
| the "Tendons and Muscles" that enhance profitability | | | | seems that the primary prerequisite for becoming a |
| within the supply chain itself. | | | | Purchasing Manager is being a buyer for the company |
| Most of us "Talk the Talk" and can quote supply | | | | and having long tenure... Promoting our senior buyer |
| chain gospel. In fact, deep down we really do believe | | | | to Purchasing Manager simply due to how long they |
| that profitability in the industry is driven by the supply | | | | have been with the company is a common mistake. |
| side of the equation. Yet, in reality, we may not | | | | This misconception is often based on the lack of |
| really understand the true value, the contributions, | | | | understanding about the critical nature of the position |
| the skill set required for success and how to | | | | and how it should contribute to the overall success |
| recognize or leverage talent within our own | | | | of the organization. |
| organization for this critical piece of our overall | | | | Different Skill Sets |
| success formula. | | | | It is an undisputable fact that different skill sets are |
| Supply Chain Management (SCM) | | | | required to become a successful Purchasing Manager |
| Understanding SCM is basic to understanding the | | | | as compared to being a successful buyer. Purchasing |
| necessary purchasing culture required to leverage our | | | | is a profession that requires professionals. Managing a |
| ability to maximize profitable growth. It begins with | | | | group of professionals with the type of personalities |
| understanding your markets, your customer base and | | | | required to succeed sandwiched between the needs |
| the future of the industry. It is critical that we | | | | of the sales force, the needs of the vendor partners |
| understand SCM and how to create an effective | | | | and the obligation to be cost effective, competitive |
| purchasing culture that supports company strategic | | | | in the market place and maximize growth and |
| initiatives. This obviously includes maximizing profitable | | | | profitability is not an ordinary challenge. Yet, in my |
| growth while maintaining world class service and | | | | humble opinion, it is probably one of the most |
| customer satisfaction. | | | | important management positions you can hold in a |
| Keep in mind the fact that the supply chain will exist | | | | company. Purchasing Management holds the key to |
| whether or not we have a competent, Superstar | | | | meeting company objectives. Effective Purchasing |
| Purchasing Manager running the buy side of our | | | | Management builds the platform for success. |
| profitability equation. (E-mail for a copy of the article | | | | Don't cringe; Purchasing Managers need to have a |
| "Margin Management--Using the Supplier Profitability | | | | sales personality before they can really understand |
| Ratio") There are a number of academic definitions | | | | the science of selling in the wholesale distribution |
| of SCM published today for reference. However, I | | | | industry. This is a prerequisite to building an effective, |
| believe the definition can be stated in these terms: | | | | supportive purchasing organization that develops |
| "Supply Chain Management is the coordination of | | | | policy and procedure, creates a cost effective |
| partnerships between the manufacturer, importer, | | | | process, negotiates beyond the purchase price, |
| distributor and customer that results in maximizing | | | | develops a staff that understands the necessity of |
| growth, profitability and customer satisfaction." | | | | relationship equity with the internal sales force and |
| How Do We Create the Successful Purchasing | | | | embraces the concept of purchasing strategies that |
| Culture? | | | | are in alignment with company strategy. This sales |
| The Purchasing Manager must become the Driving | | | | DNA will come in handy for the development of true |
| Force. Sometimes the simplicity of the answer lies | | | | partnerships with vendors and gain the respect of |
| within the complexity of the question. Start by asking | | | | the company's sales force. |
| the following questions: | | | | Experience in the industry is critical and a college |
| 1. How was the Purchasing Manager selected? | | | | education is a foundation to build upon. The building |
| 2. What criteria were used in the selection process? | | | | blocks should include:o Leadership Skill Developmento |
| 3. What kind of qualifications beyond seniority was | | | | Mentoring & Coaching Skillso Sales Effectiveness |
| brought to the table? | | | | Understandingo Purchasing Certifications (CPM, APP, |
| 4. What kind of training did the Purchasing Manager | | | | CPP etc)o Organizational Skillso Scenario Planningo |
| receive after being promoted? | | | | Strategic Thinking Skillso Time Managemento |
| 5. Does training include leadership skill development, | | | | Operational Analytical Skills |
| coaching, mentoring, negotiations, sales effectiveness | | | | Super Star Characteristicso Highly Self Motivatedo |
| and team building? | | | | Optimistico Excellent Leadership Skillso Skilled at |
| Keep in mind that the purchasing environment at | | | | Coaching & Mentoringo Calculated Risk Takero |
| many companies is strictly determined by size and | | | | Listens Well --- 80% of the Timeo Plans Wello Ability |
| revenue stream of the organization. In larger | | | | to Think Outside the Box Because They Know What |
| organizations there is a distinction between the duties | | | | Goes on Inside the Boxo Excellent Communicatoro |
| of a Purchasing Manager, a Buyer and a Purchasing | | | | Inspires Excellence in Otherso Strong Social and |
| Agent. And in some cases we just employ order | | | | Interpersonal Skillso Commands a Presenceo |
| placers with little or no responsibility for growth and | | | | Honestyo Integrityo Embraces Accountability for Self |
| profitability. | | | | and Purchasing Personnel |
| Purchasing agents and buyers often focus on routine | | | | Stop and Think |
| tasks and they may specialize in particular product | | | | When the time comes for your company to create |
| lines or other groups of related commodities. The | | | | the position of Purchasing Manager or perhaps you |
| Purchasing Manager needs to focus on the strategic | | | | realize it is time to redefine what purchasing |
| side of the business, tracking market trends, | | | | management is all about --- Stop and Think; or, as |
| customer preferences, price trends, cost | | | | Lieutenant General Russell Honore so eloquently |
| effectiveness and managing the supply chain. This | | | | stated during the Katrina crisis, "Don't Get Stuck on |
| includes evaluating and qualifying vendor partners, | | | | Stupid". Think about the real value Purchasing |
| improved negotiations and the support of | | | | Management should bring to the company. Think |
| merchandising strategies. Critically important to | | | | about leverage, profit opportunities, merchandising |
| creating a successful purchasing culture is their ability | | | | and product creativity. Think about, cost |
| to coach, mentor and train their buyers on creating | | | | effectiveness, relationship equities and most |
| profitability, maximizing customer service and building | | | | importantly, think about the individual requirements |
| relationship equity with their own sales force. | | | | necessary to maximize success. Purchasing |
| The Purchasing Management Superstar | | | | Management should focus on maximizing profitable |
| Finding the right person to fill the critically important | | | | growth. We all look at sales first when it comes to |
| role of Purchasing Manager can become quite a | | | | growth and profitability. Don't overlook the ability and |
| challenge. Often times there is a tendency to simply | | | | responsibility to contribute to the primary reason we |
| rely on tenure, product experience and the | | | | are all in the business. Remember, Purchasing |
| compassionate, often misguided feelings of employee | | | | Management must become the muscles and the |
| entitlement. | | | | tendons that maximize profitable growth. |